Im confused I talk to people some say to settle others say to pay in full. Is their a defferance? I know that paying in full is obviously the best way to go, but I wouldnt mind saving some money if settling is going to have the same effect on my credit report. I own a home, lease a car, an have one credit card which are all in good standings. Is settling for less going to have the same effect as paying in full? Since I have been in collections for about 2 years. these collection companys have been reporting badly on my credit report for 2 years, even if I pay in full is it true that it will still be on my credit report for several years? Why not settle for less an save the cash. Right??
2007-09-25 06:57:38 · 4 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
If you pay them all off at once it is best.
If you ask them to settle for less, the difference counts as income on your taxes, in addition to the bite on your credit rating.
If it is a lot of money, you probably should consult a Bankruptcy attorney.
2007-09-25 07:05:50 · answer #1 · answered by Feeling Mutual 7 · 1⤊ 0⤋
Settling will have a negative impact on your credit, but it will be cheaper. What is better for you in the long run? Are you willing to take the hit on your credit report? I guess it depends on how much you can save by settling.
Good luck. I hope your able to get their claws out of you and be free!
2007-09-25 07:06:49 · answer #2 · answered by MauriceChavez 3 · 0⤊ 0⤋
All (four) responders have given you excellent advice. I know through my own experience that debt consolidation/management is REALLY a good option. Check them out. There are a number of companies that are non-profit. They will set you up on a payment plan, contact your creditors and renegotiate interest and terms. The one I'm currently working through takes the money and pays it out so that as each one gets paid "In Full", the money then gets transferred to a different creditor so that the minimum gets doubled and tripled. I am going from being about $35000 in the hole (over night) three years ago to debt free next year! The other piece of advice I offer is to avoid those creditors who offer 0 or 1% interest. It takes only one late or bounced check to jack your whole financial plan... In my case, the wife's ex-husband's child support check bounced and everything just spiralled from there. We went from being at a managable 0% interest to 29.9% over night!
2007-09-25 07:18:34 · answer #3 · answered by Doc 7 · 0⤊ 0⤋
here is the difference, if you settle with them, 90% of the time it will stay on your credit, and report as "settled with creditor" on your credit. If you pay in full, the creditor will most of the time delete the tradeline and the negative off of your credit. If you do this, make sure to get in writing that they will be doing this. That is honestly the big difference. What i recommend, is ask them what they will settle for, then ask if they will delete it off your credit if you paid the settlement amount. IF not pay in full to get off your credit ,if they will delete with settlement amount, then of course do it. Hope that helps
2007-09-25 07:08:04 · answer #4 · answered by justin g 2 · 1⤊ 0⤋